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Wednesday, June 20, 2007

Security vs. Emissions, Round I

It's probably premature to describe yesterday's Senate votes on energy as another turning point for coal in this country. Two separate amendments promoting coal-to-liquids (CTL) were voted down by healthy margins, as described in today's Washington Post. That doesn't automatically derail the industry's interest in producing liquid fuels from coal, but it seems to ensure that the final energy legislation coming out of Congress this year will include neither federal funding for CTL, nor a privileged place for its output within the liquid alternative fuels mandate of 35 or 36 billion gallons per year. While the US clearly can't ignore the energy bounty of the coal under our land, it looks increasingly likely that concerns about climate change will constrain coal's future contribution to sectors in which most of its CO2 emissions can be prevented from entering the atmosphere. That represents a real energy milestone.

In arriving at yesterday's decisions, it might appear that the Congress is expressing skepticism about the potential for Carbon Capture and Storage (CCS) technology to put CTL on an equal emissions footing with petroleum products. I don't think that's the case, because Senator Dorgan's SAFE Energy Act of 2007 (S-875), which is the centerpiece of the Senate's current debate on energy policy, spells out the importance of CCS in its charge to the Secretary of Energy to undertake R&D for CCS. If anything, the importance of CCS as an enabling technology for coal (and shale) has been elevated, at the same time that CTL has been recognized as a less attractive path towards low-emissions energy than biofuels or electricity.

I don't mean to rehash yesterday's posting, which addressed some of these same issues. Nor do I think that these votes rule out CTL entirely, because it could still emerge on a purely commercial basis. But I think it's worth noting that on its first opportunity to choose between the two main priorities that have emerged for national energy policy, enhancing energy security and reducing greenhouse gas emissions, the Congress has set the latter higher than the former. That could create a precedent that will carry beyond the current Congress and into the next Administration, regardless of who wins in November 2008, Democrat, Republican, or independent.